Q4 Preview: Is Intel (INTC) 'Outside'?
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Intel Corp. (Nasdaq: INTC) is trading lower ahead of the company's fourth quarter earnings release, expected out after the market closes today. Shares are down 0.2% today.
Intel is expected to report EPS of $0.53 coupled with revs of $11.37 billion. Last quarter, the Santa Clara, CA-based tech magnate posted EPS of $0.52 on revs of $11 billion, both topping estimates. Looking back to Q409, we see that Intel blew up Street views by reporting EPS of $0.40 on revs of $10.6 billion, compared to the consensus EPS of $0.30 and $10.16 billion in revs.
Shares of Intel gained 9.7% through the quarter to $21.03 at the end of December. The stock is down 1% since the end of the quarter, and it gained 3.9% though 2010.
A simple valuation puts INTC with forward P/E of 10.7x FY11 EPS estimates, compared to 19.1x for Advanced Micro (NYSE: AMD), 27.7x for NVIDIA (Nasdaq: NVDA), and 13.1x for Texas Instruments (NYSE: TXN).
Data from Bloomberg has 31 analysts with a Buy on INTC, 18 with a hold, and three suggesting to Sell. The analyst price target average is $24, with a high of $32 and low of $17.
Summary
With their third quarter earnings release, Intel said that they are expecting fourth quarter revenues of $11.4 billion, +/- $400 million. At the time, the guidance was just ahead of the consensus calling for revs of $11.33 billion. Gross margins are expected to be about 67%.
2011 could be tough as tablet devices, which Intel doesn't have a presence in, continue to gain traction versus the PC and Netbook markets.
Wells Fargo is expecting an EPS of $0.54, though Q410 results are not expected to be particularly impressive. They believe that Intel will beat slightly to the midpoint of guidance calling for a 3% increased in sequential sales growth. Wells hopes that Q11 and FY11 guidance is reassuring for investors. Wells notes that "Intel expects inventory units to be down in the December quarter with inventory dollars up a couple hundred million dollars."
Looking ahead, Wells anticipates Q111 gross margin of 64% and FY11 GM of 65.1%, but down from the same period in 2010.
Wells currently has an Outperform on the shares, with a valuation range of $24 - $30.
The WSJ echoes many investors long-term concerns, especially following an announcement out of Microsoft (Nasdaq: MSFT) last week that had the PC giant aiming to support ARM-based technology with their new Windows offerings, noting that they will still partner with Intel and AMD, but Windows will no longer be exclusive to the two "microprocessor leaders." WSJ notes that Intel is likely to stay strong as "makers like Dell may hold off on making computers with ARM chips until software companies write ARM-compatible code."
Intel Corp. is expected to release their Q410 earnings on Thursday, January 13, 2011, at approximately 4:00pm EST. Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.
Intel is expected to report EPS of $0.53 coupled with revs of $11.37 billion. Last quarter, the Santa Clara, CA-based tech magnate posted EPS of $0.52 on revs of $11 billion, both topping estimates. Looking back to Q409, we see that Intel blew up Street views by reporting EPS of $0.40 on revs of $10.6 billion, compared to the consensus EPS of $0.30 and $10.16 billion in revs.
Shares of Intel gained 9.7% through the quarter to $21.03 at the end of December. The stock is down 1% since the end of the quarter, and it gained 3.9% though 2010.
A simple valuation puts INTC with forward P/E of 10.7x FY11 EPS estimates, compared to 19.1x for Advanced Micro (NYSE: AMD), 27.7x for NVIDIA (Nasdaq: NVDA), and 13.1x for Texas Instruments (NYSE: TXN).
Data from Bloomberg has 31 analysts with a Buy on INTC, 18 with a hold, and three suggesting to Sell. The analyst price target average is $24, with a high of $32 and low of $17.
Summary
With their third quarter earnings release, Intel said that they are expecting fourth quarter revenues of $11.4 billion, +/- $400 million. At the time, the guidance was just ahead of the consensus calling for revs of $11.33 billion. Gross margins are expected to be about 67%.
2011 could be tough as tablet devices, which Intel doesn't have a presence in, continue to gain traction versus the PC and Netbook markets.
Wells Fargo is expecting an EPS of $0.54, though Q410 results are not expected to be particularly impressive. They believe that Intel will beat slightly to the midpoint of guidance calling for a 3% increased in sequential sales growth. Wells hopes that Q11 and FY11 guidance is reassuring for investors. Wells notes that "Intel expects inventory units to be down in the December quarter with inventory dollars up a couple hundred million dollars."
Looking ahead, Wells anticipates Q111 gross margin of 64% and FY11 GM of 65.1%, but down from the same period in 2010.
Wells currently has an Outperform on the shares, with a valuation range of $24 - $30.
The WSJ echoes many investors long-term concerns, especially following an announcement out of Microsoft (Nasdaq: MSFT) last week that had the PC giant aiming to support ARM-based technology with their new Windows offerings, noting that they will still partner with Intel and AMD, but Windows will no longer be exclusive to the two "microprocessor leaders." WSJ notes that Intel is likely to stay strong as "makers like Dell may hold off on making computers with ARM chips until software companies write ARM-compatible code."
Intel Corp. is expected to release their Q410 earnings on Thursday, January 13, 2011, at approximately 4:00pm EST. Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.
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